Production

The performance of improvement and regeneration cuttings
by RMK workforce and the purchasing of services from contractors and the
shipping of timber to customers is treated as the production
process.

Production is the most resource-consuming process of RMK,
accounting for a quarter of total costs and using a large number of employees
and the majority of contractors. The objective of production is to produce a
valuable timber assortment with optimum costs. This process is accomplished in
compliance with the principles of sustainable use of forest.

The performance of silvicultural cuttings (thinning, uniform shelterwood
cutting, improvement of young growths) requires skilled employees with long-term
professional experience. For that purpose RMK employs a permanent staff of
loggers. RMK performs relatively more thinning with its own employees and
technology and increasingly less regeneration cuttings. Purchased services
accounts for nearly 90% of the total cutting volume.

The best time for logging works is in the winter when the ground is frozen,
but in order to unify the annual scope of activities it is essential to offer
work during a longer period. One objective of the production is to ensure an
even scope of activities during the eight month period. This guarantees the
uniformity of offered services and cash-flow. As the cutting machines are
expensive, the scope of contract offered to each contractor providing logging
services will be increased to maintain competitiveness and sustainability.

Taking into consideration the current labour market situation it may be
estimated that manual labour will become more expensive as several developing
branches of industry (construction, infrastructure building, agriculture) need
skilled workers. Due to this the production price will continue to increase and
the importance of manual labour in the field of logging works will
decrease. As elsewhere in the world, the importance of logging made by
machines will also grow in Estonia.